Internet of things (IoT) and data-driven techniques are creating greater opportunities for smart dairy farming. The demand for milk is continuously increasing due to increasing population of the world. The consumption of the dairy products is more in developed countries as compared to developing countries. To meet this increased demand for milk products, better technological techniques for improving milk yield are required. It is expected that the use of IoT and different AI techniques can assist a farmer to overcome different traditional farming challenges and increase the milk production. In this research, the authors address different challenges that a dairy farmer has to face in daily life. Brief introduction of smart dairy farming (SDF) is presented with respect to the innovation in production and the processes of smart dairy farming. This review focuses on different aspects of smart dairy farming, and finally a state-of-the-art framework that can assist the farmers to increase the milk yield by using different latest technologies has been proposed. These technological methods can decrease the factors negatively affecting milk production and increase those positively affecting production with minimal resources.